Curbs put on FDI in railways
Earlier this month, Centre had cleared relaxing of foreign direct investment in Railway
New Delhi: With the ministry of home affairs raising security concerns, the government on Wednesday decided to impose certain restrictions on FDI in railways for projects in “sensitive areas”, as it stipulated that such proposals seeking overseas investments beyond 49 per cent will be cleared by the Cabinet Committee on Security.
Earlier this month, the Union Cabinet had cleared the long-delayed proposal for relaxing foreign direct investment policy in the cash-starved Indian Railways.
Sources said that the MHA had raised concerns with regard to rail infrastructure in border areas. To deal with all the security related issues in “sensitive areas” such as border and tribal areas, FDI proposals beyond 49 per cent will be cleared by the CCS, sources said.
In all other areas such as high-speed train systems, suburban corridors and dedicated freight line projects, 100 per cent FDI is permitted through automatic route.
The foreign investment liberalisation in the sector is aimed at helping in modernisation and expansion of the rail projects. According to estimates, the sector is facing a cash crunch of around Rs 29,000 crore.